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I think it's natural that google will be getting into pay services, especially since they have a lot of trust from people, and trust is a big part of this payment middleman provider thing.

My views on google are very very mixed. They clearly care about hiring very smart people to create some very cool stuff and are probably more moral than most companies. But on the other hand I think they are benefiting from a completely out of whack publicity system on the web that makes every whisper of a new service a worldwide glorious event akin to the resurrection of jesus.

And they get away with things that have to make microsoft cry every day.. this approach where they don't tell people how they decide to pay them for showing adsense ads, and this scheme they get away with by calling everything beta is a master stroke that i hope doesn't catch on.. here is the screen i got when trying to apply for google payment thing for DonationCoder:but hey it's beta, so what do you expect

Anyway, i still think that the new pay service might be a good thing. Here's the cnet article:

Quote

Google on Thursday unveiled its much anticipated online payment processing system designed to offer shoppers with a Google account a quick way to pay for things.

Web sites and merchants can integrate Google Checkout into their sites as an alternative payment processing method to existing checkout and credit card processing systems, said Salar Kamangar, vice president of product management at Google. Consumers with a Google account can type their credit card and billing information into Google Checkout once and then pay for purchases thereafter with practically one click on any Web site that features the system, Kamangar said. As things now stand, he said, "If I buy five things from five different merchants I have to fill out five different forms. This process can take three, four, five minutes" for each form. Google Checkout is meant to change that.

Once they've purchased something through Google Checkout, consumers can track their orders through the system, which will be live starting Thursday at Checkout.google.com.

Merchants using the system will be charged a processing fee of 20 cents per transaction, plus 2.2 percent of the relevant purchase price. Customers who pay for search-related keyword ads through Google AdWords will be able to process, free of charge, transactions that add up to 10 times the dollar amount of their AdWords spending, Kamangar said. Beyond that, they pay the 20 cents plus 2.2 percent. Kamangar said the regular transaction fees are less than those charged by credit card companies, which can be about 1 percent higher. ...

just to sum up my interpretation of the claim of "predatory pricing", it means thatgoogle is willing to take a loss on any profits directly from this service, so that they can hook in more advertisers using adwords.

in essence this is kind of my impression of google as a whole:if the entire google company is really a giant machine designed to make money from their advertising, with everything else serving to aid this, is this something to be concerned about? i'm not sure about the long term implications of this but it makes me a little uneasy.

I agree, mouser. It's fine and natural for google to want to make money in general, and as long as they making a net profit when it's all said and done, then google is perfectly happy, and that makes sense. However, from a idealistic standpoint, it sucks because it's like they are purposefully putting poor products out because they know there is still a net profit. From a user's standpoint, we just don't want to see anything put out if the quality is not good, but that's not thinking like a businessman.

i don't think they are putting out poor products on purpose. in fact i think most people i've talked to have generally been extremely impressed with google stuff so far (gmail, maps, etc). so kudos to google.

i think the concern might be however, that if the only goal is publicity and advertising dollars, and the products are really just ways of getting attention and press - then it means that once a product enters that relatively quiescent state where it's not getting monthly free press, does it suddenly become the ugly stepchild and get kicked to the curb?

in other words, if everything google does is just to get attention and feed their advertising beast - then does the game become to keep releasing a new beta program every month, and let the old stuff just die and wither on the vine? it's too early to know.

i guess i'm just wary about this whole advertising driven business wave we seem to be riding on.

i'll also come back to what i've said before - i'm a strong believer in focusing on incentives.if your company makes money by making people happy - that's a nice situation, because your incentive is to do good, and in doing good you make money.

if celebrity and publicity makes money, even if the publicity is being arrested for murder, then you've got a situation where the incentive is to do do bad. if blood is what makes people watch your news channel, then your incentive is to hope for war.

so my question with this stuff is, what is the incentive/motivation for companies like this? if all the money comes from advertisers buying ads, then the entire incentive is not to build good products, but to please the advertisers. sometimes this may be best served by making good products that people love - sometimes it may be best served by taking a loss in a whole range of markets in order to kill competition.

it's a very weird situation when revenue is based on advertising - it basically means what you are doing has nothing to do with the way you are making money - you are making money as a side effect of the traffic on your site. maybe in some ways this is a good thing, because it means you might be able to do things that in and of themselves are not money making things, just because there are enough people interested in it to let you survive on advertising traffic. so maybe it's a good thing i don't know.

it's very confusing actually. imagine if we had 100x times the traffic on this site.. we could put advertising back up on the pages and never have to ask for another donation. advertising revenue would pay for the entire site and fund all programming.. strange.. but then if no one was donating to support the software.. it would lose something i think.. there is something more pleasurable about the idea of people actively supporting the content on this site...

i wonder how this would look like in the real world..imagine if your local bread shop had free bread.. you never have to pay for bread any more.. but when you come into the store to buy bread you have to wait on line and listen to some adverts while on line.. one one hand you get free bread and the baker still gets paid.. on the other hand, something just seems wrong about it..

i think there have been some great developments that have come out of the ability of people to put ads on their sites - like the ability for good writers and bloggers to make some money that they otherwise wouldn't have. i think it's so good that individuals can make enough money on ads to be able to do their own thing.

i just wish that people were more willing to donate directly to authors and bloggers rather than this indirect ad stuff.. ironically, i'm guessing that regular readers are not the ones clicking on the ads.. so the site is funded by non-regular readers who stumble onto the site.. weird.

is it too rude to suggest that we have a debate at some point about having advertising here (i don't think it's been mentioned for a while).

mouser, you know my stand point anyway on donating and ethics, etc. i'm just starting to wonder if there are 'good' adverts that allow more revenue to come in and then pay authors to create more content then isn't that worth some serious thought?

i am turning to the dark side? maybe. but as the reviews have dried up again i'm beginning to think people need a financial incentive to put all that work into the reviews we want to see on donationcoder. unfortunately a money reward appears to outway every other kind of payment.

we know there is plenty of scope for the reviews - we know people want to see them - we know they have dried up.

i'll leave it at that - just wanted to try and open up the debate as you are hinting at it quite strongly (or maybe that's just my warped minds interpretation).

i'm afraid thought that part of the review problem is to blame on me.. several people have sent in partial reviews and are waiting on me to edit them..i'm going to make a concerted effort to get it done in july so that we have a few reviews in july.

we really need to revive the review section.. i just don't know if adverts are the solution.. finding a print syndicator is probably a better solution to paying reviewers.

very interesting post from Jellyfish blog - a service that is trying to do web advertising differently by sharing profits with users.

Jellyfish sounds like a really nice and different idea to me.. i wish them luck and hope that can compete against google.. i'm afraid they might get squished though.. definitely worth checking out:

Quote

Is this a fair trade off? I give Google all of my purchase data (what I buy, when I buy, how much I buy) and they use it to benefit me by: 1) offering me the convenience of Checkout; and 2) giving me more advertising that will be more targeted to things Iâ€™m potentially interested in (to quote Marshall Kirkpatrick â€śMinority Billboardsâ€ť). And you know what Google gets? They get to jack up their ad rates, charging bigger dollars to the companies that have to pay to reach you because you might buy what they are selling. Iâ€™m pretty sure Google has done the math here and fully expects their increased ad rates to outweigh the cost of the Checkout service. And you, as the end consumer will have no idea what that increase will be because Googleâ€™s advertising market isnâ€™t transparent.

At Jellyfish, we donâ€™t think this is a fair trade off. Targeted ads are nice, but the adâ€™s Google will likely show you are from the advertisers that paid the most to get to you (Just because company X outbids Company Y to get in front of you at Google doesnâ€™t mean that company X is the most relevant for your needs). And most importantly, you wonâ€™t benefit from the competition that is fueled by Google having access to your buying information (or what we would call your historical record of buying intentions).

At the end of the day, I think Google is doing some major free riding on the extreme value you create by allowing them to store and sell off the database of your buying intentions (e.g., your purchase history) to the highest bidding advertisers.

We intend to do this much differently at Jellyfish, because with our VPA advertising we always share back at least half of the advertising dollars that a merchant pays for your attention (both historical buying intention and present intention to buy when you search for a product at our site). Thus, anytime a merchant pays more to get your attention at Jellyfish, you will get a direct, tangible benefit in the form of lower prices. Itâ€™s the way we hope to show consumers that when it comes to their buying activity and attention, there is a better way.

here's a pretty positive take on google checkout.. from the standpoint of it being smart business for google as a way of leveraging their advertising and removing the possibility of fraud from their ad system.

Google Is A Very 1.0 Shopping EngineWith the launch of Google Checkout, Google is clearly aiming to be the worldâ€™s online shopping engine. The strategy has all the hallmarks of AdWords â€” Google doesnâ€™t care what youâ€™re looking for, what you find, or where you buy it â€” so long as Google can make money off of every step of the process. Hereâ€™s the problem with this strategy â€” from the consumer perspective, Google is not an efficient way to shop online. Googleâ€™s blog mentions Starbucks are one of the merchants that signed up for Google Checkout, so letâ€™s try searching for â€śgourmet coffee.â€ťThereâ€™s nothing wrong with the ads in the search results â€” each of these gourmet coffee merchants is potentially relevant. The problem is that I have no way to compare them â€” all I can do is click and browse, click and browse.

Google revolutionized search by leveraging the network effect of hyperlinks to determine relevancy â€” but the 2.0 efficiencies of page rank are completely missing from AdWords. Sure, advertisers compete on keyword relevance, but I as a consumer am unable to benefit from the network effects of the larger online shopping community. Which of these merchants has the best value proposition for people like me? Where do people like me most often shop? Which has the most relevant products? Which has the best prices?

Navigating Google ads feels like Yahoo circa 1997 â€” a lot of clicking and browsing in hopes of finding the right fit. The organic search results may be super-relevant, but the â€śsponsoredâ€ť results are of limited value because the cost-per-click bids are too big a factor in ranking and there is no information available from my peers. The advertisers are in complete control. The ads are relevant to a degree, and certainly more relevant than the random interruption of old media models, but as a consumer, Iâ€™m still at the mercy of the system. And the return on my attention is marginal at best....

i agree with you, Carol. i'd even go as far as to say i don't click on any adverts - well, i suppose i must do once in a blue moon. i'm sure there are a vast number of people that never click on an advert.

if i'm after a product i'll do a search for it - or, i'll just go straight to a site that i expect will have the product. when i'm not 'online shopping' then i'm blind to adverts and banners.

i think there was an article on digg.com recently - if i remember correctly it said that a great deal of web surfers are 'banner blind' in that they simply ignore typical banner sizes and advertisements.

i assume that anyone who has used the internet for a few months will ignore banners. i'm more perplexed that anyone does click on an obvious banners advert. maybe i'm just too much of a snob so nothing takes my fancy.

I often use Google like the Yellow Pages: if a big company is preferable for a particular job then I may select a paid add (I've always thought that if they've got money to throw into paid advertising in a telephone book and they've been doing it for years then they must be doing their service adequately enough to stay in business).

This may not always be true of Google paid adds, but every now and then I'll check one out to compare.

And as for banners: I don't think I've ever clicked on one. Hmmm, maybe we're all snobs??

Here is my take on this. I see the Google advertisement program as organically complementing the Google pagerank system. Basically, when searching Google your attention is split approx 80/20 between older content that received high human evaluation and a new content selected automatically for relevance and not yet human-evaluated. In this case, Google gives you a choice between older and more reliable, and newer and less reliable. You can either choose to exploit or to explore. I think this is quite reasonable because human evaluation through placing links and getting high pagerank takes time, advertising allows to buy this time through buying people's attention. In a sense, investors bet on the value of their site to force its faster evaluation by people.

There's lots of higher level discussion about the greater repurcussions of this move and the philosophical, economic, etc. impact. I'm curious why no one seems to be evaulating this approach from the consumer perspective though. I haven't used the service yet but from what I understand there are two major things it offers, both of which are *extremely* attractive to me. 1: A singler user name and password combo to handle payment on many different payment sites. Assuming this service gets adopted quickly, and being Google it should (especially given that they're undercutting other similar providers), that means I should have a much easier buying experience on lots of shopping sites soon. 2: Unless I'm reading these articles wrong it says I can "track the status of my orders" from Google's payment management console. If that's true, and if it extends to even tracking shipping details, that's huge to me. I hate having to go to each merchant's site to track each individual purchase! Especially when they are smaller merchants, they don't all offer the same services, or level of service, or do things the same way. If Google has figured out a way to provide a uniform level of service for partner merchant transactions that is of great interest to me as a consumer.

What's the trade-off? Google gets my purchase data. Whoopdee-doo. I don't trust Google any less than I trust Joe-random merchant, and probably a bit more at least. And they also increase costs to advertisers, but those costs seem justified because the ads are a lot more targetted. Meanwhile my own ad-based search results, which have always been present, may potentially be more "relevant" *if I am logged in to Google when searching*. Say I want to not have those "relevant ads" - just log out and clear cookies. No problem.

So from an immediate perspective this definitely doesn't seem bad for the consumer. I think the only reasonable argument that it may be hinges on the assumption that product costs will go up due to increased ad cost. But, at least in theory, the ads are now more targeted and so advertisers get more value out of them in terms of purchases, and thus should have no reason to increase product price. In fact you could argue the opposite, that in theory since advertisers can basically now only pay for successful transactions, they can much more precisely determine their marketing overhead for each transaction and budget accordingly, thus potentially allowing them to reduce cost to be more competitive.

Ultimately I do see there are concerns with this. But just as I have always tried to be fair with Microsoft and each move they make, despite their "evil" reputation, I like to do the same with Google. It is good to be critical and cautious up-front with any major feature launch from a company like this, especially one that deals with money and your financial details in general. It just feels like most people are being knee-jerk reactionaries and calling foul based on a lot of assumption and an incomplete assessment of not only the facts but the possible outcomes.

Am I a Google fanboy? I don't think so, but maybe. I haven't used 75% of the new services they've debuted in the past 2 years. I don't use GMail (not because I don't like how it works, I just don't need/want it), I'm not interested in Google Desktop, I don't use the Google Toolbar, I rarely visit Google News. In fact my Google use has stayed pretty consistently focused on main search and image search for years now, with Google Maps on the rise in my use of late simply because I like the interface. I use a smaller percentage of Microsoft products, but they also have a much wider range of products. With both companies I am simply focused on trying to realistically evaluate their services, both from a personal (do I want to use this?) as well as broader (how will this effect things?) perspective. I guess maybe I'm just an optimist?

If you want these kind of services they have been available through MS Passport and Yahoo shops for a long time, can't quite see why Google should be any different. Seems to me they have similar monopolistic aims to MS these days - and seem just as bent on profit and sod the consequences.

I've used Paypal's services and it doesn't do everything I want, and not in the way I want. It does provide the "one user/pass" feature, which is nice, but as far as I have seen it doesn't allow a centralized place to track purchases. I mean yes the financial end of it is done that way, but it doesn't include shipping stuff (I have no idea if Google's does either, but that's definitely something that would get me interested). I also really, really, really don't like PP's business practices. It's more than possible Google will become just as "evil" now that they're dealing directly with people's money, but the inability to actually "store" money in a Google account seems to lessen that worry for me, and although many are complaining about it not being a "real payment service" because you can't put money in an account, I for one am very, very glad it doesn't work that way. Anyway I'd much sooner trust Google with just my credit card info than I would Paypal. Haven't tried the Yahoo, etc. services but IMO that's even more reason to be annoyed at everyone crying foul now that Google is trying this. If Yahoo and MS have already done it why is it a problem if Google does?!

i very much doubt google is doing any shipping tracking. i see no signs of it.

paypal has come in for some criticism but over the years i have to say i have been extremely satisfied. they have proven to me at least that they know what they are doing, and do it well. their fees are lower than anyone (except perhaps google now!).

i will list some things paypal does that google doesn't yet:great refund system, user-chosen donation amounts, full subscription-based system (for scheduling regular payments), easily download history in quicken/csv/etc format.

paypal could really use some simplification and re-organization of their website and account pages - i expect google checkout may force them to do so, which would be good.

i will wait and see how google handles this.. but right now i am very satisfied with paypal and interested in the features it has that google checkout doesnt.

having said that, it's not hard to support both, and i think people will be inclined to trust google payment system - so if people are happy with it, we're happy to support it here.